Part of the reason is that labor costs in China are far lower than labor costs in the United States. As China has developed industrially, some would say that their labor laws have not kept pace, leading to extremely low compensation to laborers.
Another factor is the value of Chinese currency, the Yuan and the possibility that the Chinese government keeps it artificially low in value compared to other international currencies such as the Dollar or Euro. The depreciated value keeps costs and wages low because it allows for cheaper exporting (because the importers are paying the Chinese in high value currency) and it is then converted into Yuan.
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